Q1 2026 Honeywell International Inc Earnings Call Transcript
Key Points
- Honeywell International Inc (HON) delivered strong first-quarter results with 11% adjusted earnings growth, demonstrating the strength and agility of its operating system.
- Orders grew 7% organically, driven by the Building and Industrial Automation segment and the petrochemical and refining verticals in the Process segment.
- The company expanded its margin by 90 basis points to over 23%, aided by pricing discipline, productivity, and accelerated stranded cost removal.
- Honeywell International Inc (HON) announced the sale of its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, expected to close in the second half of 2026, further simplifying its portfolio.
- The Aerospace segment showed strong demand with a 28% orders growth over the last 12 months, leading to a $19 billion backlog, a 20% increase from the prior year.
- The Middle East conflict impacted revenue by approximately 0.5% in Q1 and is expected to cause a 1% impact in Q2, particularly affecting the Process Automation and Technology segment.
- Temporary mechanical supply chain constraints in Aerospace led to a slowdown in January and February, affecting sales growth.
- The Process Automation and Technology segment experienced a 6% organic sales decline in Q1 due to timing delays in refining catalyst reloads and automation service upgrades.
- Free cash flow decreased to nearly $100 million from $200 million last year, impacted by timing of collections in the Middle East and inventory headwinds in Aerospace.
- The company is maintaining a cautious approach to guidance due to geopolitical uncertainties, particularly the ongoing conflict in the Middle East.
Thank you for standing by, and welcome to the Honeywell first quarter 2026 earnings conference call. (Operator Instructions) Please be advised that today's call is being recorded.
I would now like to hand the call over to Mark Macaluso, Senior Vice President of Investor Relations. Please go ahead, sir.
Thank you. Good morning, and welcome to Honeywell's first quarter 2026 earnings and outlook conference call. On the call with me today are Honeywell Chairman and Chief Executive Officer, Vimal Kapur; Honeywell Aerospace Technologies President and Chief Executive Officer, Jim Currier; and Senior Vice President and Chief Financial Officer, Mike Stepniak.
This webcast and the presentation materials, including non-GAAP reconciliations, are available on our Investor Relations website. From time to time, we post new information on this website that may be of interest or material to our investors.
Our discussion today includes forward
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